If You Like Amy’s Baking Co., You’ll LOVE This CEO.
May 22, 2013
If You Like Amy’s Baking Co, You’ll LOVE This CEO by Sean Kelly, Publisher, UnhappyFranchisee.Com
[Warning: Offensive Language]
When I read the Huffington Post story about the social media meltdown of Amy Bouzaglo, the now-infamous owner of Amy’s Baking Company, I wondered if CEO David Rutkauskas might be her twin brother.
When Yelper Joel L. criticized Amy’s Baking Company, owner Amy Bouzaglo replied: It is blatantly obvious to me why you were ALONE on a Saturday night!
When I criticized Beautiful Brands International (BBI), CEO David Rutkauskas tweeted: when was the last time u had a women hit on you . HaHa. or u had a women Sean Fuck Fat Face…
When Joel L. said he thought Amy’s Baking Co owners were indifferent to their customers, Amy Bouzaglo wrote: Do US a favor and keep your ugly face and you ugly opinions to yourself…
When I wrote that BBI was indifferent to their franchisees’ needs, CEO Rutkauskas tweeted: fat fuck ugly shit face SK… Sean Fuck Fat Face… Dickface ugly mother fucker who is Sean Kelly
Amy’s Baking co-owner Samy Bouzaglo allegedly* wrote on FaceBook: To all of the Yelpers and Reddits: Bring it on. you are just pussies. come to arizona… come to my business. say it to my face. man to man… you are just trash…
David Rutkauskas tweeted to me: hey there Sean Kelly, why don’t u travel to Tulsa and say all this Bull Shit to my face ? … I dare you tell me to my face all your fucked up lies and bull shit. u coming 2nite pussy ?
BBI CEO David Rutkauskas also challenged me to square off with his 81 year old father (who was an amateur boxer, I guess, years before I was born) and his high school age son.
Unfortunately for David, I’m a blogger, not a fighter.
Instead, I’ll let CEO David Rutkauskas’ tweets speak for themselves:
| CEO DAVID RUTKAUSKAS TWEETS (a sampling) | TWITTER SCREENSHOTS |
| David Rutkauskas @davidrutkauskas fat fuck ugly shit face SK when was the last time u had a women hit on you . HaHa. or u had a women Sean Fuck Fat Face
David Rutkauskas @davidrutkauskas thx Dickface ugly mother fucker who is Sean Kelly thx 4 our press Fathead &your 700 followers #bbitweets #davidrutkauskas |
04/05/13 (Click to enlarge) |
| David Rutkauskas @davidrutkauskas fuck off. Come see me in tulsa… let’s settle like men
David Rutkauskas @davidrutkauskas deleting my tweets ? you punk… I will be waiting for u in Tulsa to spew your lies to my face. FUCK YOU David Rutkauskas @davidrutkauskas all lies U need help. Made up crap from a low life fuck off Sean. Or travel to Tulsa & confront me like a real man David Rutkauskas @davidrutkauskas I dare you to spew your lies and bull shit to my Dads face , my face , my sons face David Rutkauskas @davidrutkauskas my 81 year old father would like to see u Come on down to Tulsa. My treat… would love to see David Rutkauskas @davidrutkauskas FUCK OFF… I will spread media hate about you forever… U started this shit… I will keep the fight against u 4ever David Rutkauskas @davidrutkauskas fuck you kids & family r against u. u need a punch in the mouth. u seriously need help… good boxing gyms in Tulsa I dare u David Rutkauskas @davidrutkauskas hey franchise dick… We have our own media alerts going out targeting U… I’m not scared… not embarrassed David Rutkauskas @davidrutkauskas u will LOVE this.. BBI did deals from OK-CA this week.. David Rutkauskas = $765,000 richer… Sean Kelly = 0 richer. #Funny Shit David Rutkauskas @davidrutkauskas Bring it franchise dick.. I dare you tell me to my face all your fucked up lies and bull shit. u coming 2nite pussy ? David Rutkauskas @davidrutkauskas hey franchise terrorist when u grow the balls 2 show up in Tulsa to tell your lies to my face..bring that punk GayJon with u David Rutkauskas @davidrutkauskas ... Bring your pussy ass 2 OK..I will pay one way to Tulsa.I want to see you spew your LIES to my face…#WUSS David Rutkauskas @davidrutkauskas @JonFortman. come 2 OK this week & call me a Cry Baby 2 my face? easy drive 4 u JonBoy @franchisepick #settlelikemen |
 (Click to enlarge) |
| Jonathan E. Fortman @JonFortman I have 70+ former Contours Express franchisees who would take a bullet for Sean Kelly
David Rutkauskas @davidrutkauskas @JonFortman @FranchisePick that’s very impressive Fartman .. Bullets, huh? R u a Jew ? |
 (Click to enlarge) |
| David Rutkauskas @davidrutkauskas @claudiarobbins @unhappyz r u a Jew 2 ?
David Rutkauskas @davidrutkauskas@claudiarobbins who the fuck r you ? Cat woman… R u in love with Sean Kelly ? Is he your lover David Rutkauskas @davidrutkauskas JonFortman @FranchisePick so.. Are u a Jew or not ? |
 (Click to enlarge) |
| mr. truth @FuckOffLiars** @FranchisePick .. We are watching U and your lies… we know where u live.&.HaHaHa… #SeanKelly #FranchisePickGay #GunsAreLegal |  (Click to enlarge) |
In a fine bit of irony, David Rutkauskas and his Beautiful Brands International is suing ME for defamation(!)
I’ve suggested, in a related post, that Mr. Rutkauskas instead sue himself for defamation.
After all, no one can sink a brand faster than a hot tempered business owner with a laptop and a faulty moral compass.
* The Bouzaglos claim hackers posted many of their most-criticized comments.
Related Reading:
Why DAVID RUTKAUSKAS & ROBERT SARTIN Should Sue Themselves (Part 1) by Sean Kelly
How Franchisors Should – And Shouldn’t – Respond to Internet Criticism
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
CAMILLE’S SIDEWALK CAFE Franchise Complaints
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Tags: Amy Bouzaglo, Samy Bouzaglo, Amy’s Baking Company, Amy’s Baking Co, David Rutkauskas, Beautiful Brands International, BBI, Unhappy Franchisee, UnhappyFranchisee.Com
Why DAVID RUTKAUSKAS & ROBERT SARTIN Should Sue Themselves (Part 1) by Sean Kelly
May 22, 2013
Why DAVID RUTKAUSKAS & ROBERT SARTIN Should Sue Themselves (Part 1) by Sean Kelly
I am being sued by two bullies from Tulsa, OK: David Rutkauskas, CEO of Beautiful Brands International (BBI), and his “muscle,” respected attorney Robert Sartin of Barrow & Grimm, PC*.
According to an article in The Journal Record, the bullies claim that I made comments that “implied that BBI intimidates and threatens its franchisees, lies about the financial strength and fails to support its franchisees once the agreements have been executed.”
The lawsuit (attached below) alleges that I made comments “with an intent to cause disrepute, public hatred, contempt, ridicule and embarrassment to BBI, to deprive BBI of public confidence, and to injure BBI,” and that I “willfully and maliciously engaged in improper, systematic, concerted and deliberate efforts to destroy the good will and business relationships between BBI and its clients.”
In this regard, respected attorney Robert Sartin gives me WAY too much credit.
Even if I tried my very best, I could never have caused the disrepute, contempt, ridicule, embarrassment, or deprivation of public confidence that David Rutkauskas has brought to himself and BBI through his public rants on Twitter (some posted below) and through the bullying email and text messages he has sent to a female ex-client (not posted here. Yet.).
In fact, I believe that David Rutkauskas should sue himself for the willful, malicious, & irreparable harm he continues to do to his own reputation and to the BBI brand.
I hereby offer my services to serve as an expert witness pro bono in the proposed case of Sartin, Rutkauskas & BBI v. Sartin & Rutkauskas.
I believe respected Tulsa attorney Robert Sartin should name himself as a defendant in this proposed lawsuit for encouraging his arguably unstable client into a volatile, public & unwinnable lawsuit, despite the fact that David Rutkauskas has demonstrated a propensity for public self-destruction via social media.
Additionally, I offer the exhibits below (from my vast gallery of screenshots), to support the proposed contention that CEO David Rutkauskas has systematically and maliciously portrayed himself as an unprofessional and foul-mouthed bully with a gift for antisemitism, homophobia, misogyny and even ailurophobia (hatred of cats).
CEO as Schoolyard Bully: The Rants of David Rutkauskas [WARNING: Offensive Language]
I am confident that the Rutkauskas & Sartin SLAPP lawsuit against me will end in further embarrassment for them, as UnhappyFranchisee.Com mostly provided a forum for the complaints of the many critics of Beautiful Brands. I have been scrupulous in making sure the opinions I share are based on verifiable information from multiple sources. And I am being represented by the formidable, no-nonsense attorney Jonathan Fortman.
However, if David Rutkauskas were to sue himself for defamation, his tweets in the last few months would provide a treasure trove of damaging evidence.
Here are a few of the tweets from a man who holds himself out to be an entrepreneurial business icon, visionary and restaurant industry thought leader:
| CEO DAVID RUTKAUSKAS TWEETS (a sampling) | TWITTER SCREENSHOTS |
| David Rutkauskas @davidrutkauskas fat fuck ugly shit face SK when was the last time u had a women hit on you . HaHa. or u had a women Sean Fuck Fat Face
David Rutkauskas @davidrutkauskas thx Dickface ugly mother fucker who is Sean Kelly thx 4 our press Fathead &your 700 followers #bbitweets #davidrutkauskas |
04/05/13(Click to enlarge) |
| David Rutkauskas @davidrutkauskas fuck off. Come see me in tulsa… let’s settle like men
David Rutkauskas @davidrutkauskas deleting my tweets ? you punk… I will be waiting for u in Tulsa to spew your lies to my face. FUCK YOU David Rutkauskas @davidrutkauskas all lies U need help. Made up crap from a low life fuck off Sean. Or travel to Tulsa & confront me like a real man David Rutkauskas @davidrutkauskas I dare you to spew your lies and bull shit to my Dads face , my face , my sons face David Rutkauskas @davidrutkauskas my 81 year old father would like to see u Come on down to Tulsa. My treat… would love to see David Rutkauskas @davidrutkauskas FUCK OFF… I will spread media hate about you forever… U started this shit… I will keep the fight against u 4ever David Rutkauskas @davidrutkauskas fuck you kids & family r against u. u need a punch in the mouth. u seriously need help… good boxing gyms in Tulsa I dare u David Rutkauskas @davidrutkauskas hey franchise dick… We have our own media alerts going out targeting U… I’m not scared… not embarrassed David Rutkauskas @davidrutkauskas u will LOVE this.. BBI did deals from OK-CA this week.. David Rutkauskas = $765,000 richer… Sean Kelly = 0 richer. #Funny Shit David Rutkauskas @davidrutkauskas Bring it franchise dick.. I dare you tell me to my face all your fucked up lies and bull shit. u coming 2nite pussy ? David Rutkauskas @davidrutkauskas hey franchise terrorist when u grow the balls 2 show up in Tulsa to tell your lies to my face..bring that punk GayJon with u David Rutkauskas @davidrutkauskas ... Bring your pussy ass 2 OK..I will pay one way to Tulsa.I want to see you spew your LIES to my face…#WUSS David Rutkauskas @davidrutkauskas @JonFortman. come 2 OK this week & call me a Cry Baby 2 my face? easy drive 4 u JonBoy @franchisepick #settlelikemen
|
(Click to enlarge) |
| Jonathan E. Fortman @JonFortman I have 70+ former Contours Express franchisees who would take a bullet for Sean Kelly
David Rutkauskas @davidrutkauskas @JonFortman @FranchisePick that’s very impressive Fartman .. Bullets, huh? R u a Jew ? |
(Click to enlarge) |
| David Rutkauskas @davidrutkauskas @claudiarobbins @unhappyz r u a Jew 2 ?
David Rutkauskas @davidrutkauskas@claudiarobbins who the fuck r you ? Cat woman… R u in love with Sean Kelly ? Is he your lover David Rutkauskas @davidrutkauskas JonFortman @FranchisePick so.. Are u a Jew or not ? |
(Click to enlarge) |
| mr. truth @FuckOffLiars** @FranchisePick .. We are watching U and your lies… we know where u live.&.HaHaHa… #SeanKelly #FranchisePickGay #GunsAreLegal | (Click to enlarge) |
CEO David Rutkauskas challenged me to come to Tulsa and fight his 81 year old father.
CEO David Rutkauskas publicly asked my attorney “R u a Jew”? Twice.
CEO David Rutkauskas asked a woman he doesn’t know if she is having an affair with me and asked “R u a Jew?”
Right next to family pictures of his wife, his kids and his parents, CEO David Rutkauskas posted the words “fat fuck ugly shit face SK when was the last time u had a women hit on you . HaHa. or u had a women Sean Fuck Fat Face” and “thx Dickface ugly mother fucker.”
If we do get to court and someone asks me: “Did you damage the reputation of David Rutkauskas?” won’t the answer be obvious?
With CEO Rutkauskas’ social media meltdowns and his respected attorney Sartin holding his coat, goading him to fight all his detractors, why would I need to defame him?
He’s doing a superlative job defaming himself.
Also Read:
Beautiful Brands International, LLC vs. Sean Kelly (Link. Document is clickable mid-page)
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
DAVID RUTKAUSKAS Are His 500,000 Twitter Followers Fakes?
CAMILLE’S SIDEWALK CAFE Franchise Complaints
* Technically, I’m being sued by Beautiful Brands International (BBI), but the seasoned bully-boy team behind it is the arguably unstable CEO David Rutkauskas and his well-compensated enabler and enforcer Robert Sartin.
** I was also threatened on Twitter by user account @FuckOffLiars & insulted by @MissTroothBeTold. Is @FuckOffLiars is a Rutkauskas pseudonym? Compare writing styles and decide for yourself.
ARE YOU FAMILIAR WITH THE DAVID RUTKAUSKAS, ROBERT SARTIN, BBI OR BARROW & GRIMM PC? SHARE A COMMENT BELOW.
Tags: David Rutkauskas, Beautiful Brands International, BBI, David Rutkauskas Twitter, Robert Sartin, attorney Robert Sartin, Barrow & Grimm PC, Unhappy Franchisee lawsuit, Sean Kelly Lawsuit, David Rutkauskas lawsuit, BBI lawsuit, Beautiful Brands lawsuit, SLAPP lawsuit, Jon Fortman, Jonathan Fortman
DEADLY FRANCHISE MYTHS: The Hot New Franchise Myth by Sean Kelly
May 15, 2013
Deadly Myths of Franchising: The Hot New Franchise Myth By Sean Kelly
When people find out I’m in franchising, they invariably ask: So what’s the hot new franchise?
The idea of the hot new franchise – that exciting new company or concept that bestows instant multimillionairehood upon those in the right place at the right time who have the savvy to act (and invest) quickly – is one of the most prevalent and dangerous myths in franchising.
The siren song of the hot new franchise has drowned the hopes and dreams of thousands of normally prudent people by luring them to invest in such unproven, high risk ventures as eBay drop-off store franchises, meal preparation/meal assembly kitchen franchises, men-only fitness clubs, all-cereal restaurants, drive-thru coffee kiosks and more.
The hot new franchise concepts would be high-risk ventures even as independent start-ups, but once the burdens of franchising are heaped on, they are almost invariably toxic and doomed to fail.
To avoid falling into the hot new franchise trap, you must understand The Basic Franchise Value Equation, and why a better (albeit less fun) question is “So what are the tested, proven & successful franchises?”
The Basic Value Equation of Franchising
Here’s the single most important concept you need to understand about franchising: When you buy a franchise, you agree to start a business with some inherent & significant burdens.
Burden #1 is an upfront franchise fee, typically between $30,000 to $50,000, that you must pay the franchisor.
Burden #2 is that you must continually pay a percentage of your gross sales (regardless of whether you’re profitable) through the duration of your franchise agreement. If you fail before the end of your term, you may still be liable for an approximation of what royalties might have been had you remained open for the full term of your agreement.
Burden #3 is your loss of autonomy. Forget all those franchise ads about being your own boss and calling your own shots… when you buy a franchise you agree to do what you’re told, and to adhere to the rules and restrictions imposed by the franchisor. When you buy a franchise you can be told what you can sell, who you can buy from, how you can market, and how you price your products and services.
So why buy a franchise? Prospective franchisees assume that they will gain benefits from the franchisor that far outweigh these significant burdens. Some of these benefits may include instant name and brand recognition, efficient, established operational procedures, tested marketing programs and techniques, powerful national or regional advertising, group buying power, and the backing of a support team with years of experience.
If a given franchise requires the burdens of extra fees, royalties, restrictions and requirements but fails to provide benefits to (more than) offset those burdens, the franchise will likely fail fast and hard.
The Franchise Appeal of Boring, Old & Successful
McDonald’s is a good example of a franchise that works. A McDonald’s franchisee takes on the upfront burden of paying a $45,000 franchise fee and paying a 4% royalty, plus advertising fees and co-op contributions. In addition, McDonald’s franchisees must do what they’re told – such as maintaining the controversial Dollar Menu, and adding required equipment and products – whether they like it or not.
Few would dispute that the benefits McDonald’s provides – from expertise in site selection to universal name recognition to powerhouse national advertising – far outweigh the burdens. McDonald’s provides a proven system, finely tuned from years of trial and error, that takes the guesswork out of business ownership.
Strangely, many hot new franchises, despite having unproven concepts, no track record or national advertising, charge fees and royalties equal to or exceeding those of franchise giants like McDonald’s.
Here are a few examples of Hot New Franchises from recent years:
iSold It In 2007, iSold It was named Entrepreneur magazine’s hottest new franchise. They charged a $22,000 franchise fee, a 10% royalty and 3% advertising contribution for an unproven, experimental storefront concept selling people’s stuff on eBay. With an initial investment of $138,000 – $198,000, iSold it sold more than 400 franchises. Just over 200 opened before it was clear that the experiment was a failure and the chain crashed. The original franchisor is gone, and a smattering of stores remain.
Cereality is a cutesy, all-cereal restaurant still sold by Kahala, franchisors of Cold Stone Creamery, Blimpie, and other much maligned franchises. Donnie Deutsch on CNBC’s The Big Idea said “I love this. This is genius.” USA Today wrote: “The latest fast-food concept is so absurdly simple, self-indulgent… well, how can it fail?” Obviously, it can fail quite easily, as every one of the $200,000+ cafes have failed… some in less than 6 months. Despite the fact that just an airport kiosk and a tri-branded location remain, Kahala (aka Bad Ideas in a Bowl) is still hawking the Cereality franchise opportunity.
Make & Take Gourmet was one of a number of much-hyped “meal assembly kitchen” franchises with clever names like Dream Dinners, Super Suppers, Supper Thyme USA & My Girlfriend’s Kitchen. The hot new idea was to charge busy, professional women a fee to use a commercial-type kitchen where they could prepare gourmet meals to freeze and serve later to their families. Amazingly enough, it turned out that working women actually have their own kitchens and freezers in their homes! The Make & Take Gourmet chain imploded and most of the meal assembly kitchens have disappeared, along with the $300,000+ each they burned up in the process.
Not Every New Franchise is Necessarily Bad
The failure of hot new franchise concepts is not an indictment of every new franchise company or new franchise brand.
Five Guys Burgers and Fries is a successful, relatively new franchise company. But Five Guys was a variation of an existing concept based on a proven fact: We know people will eat burgers and fries, and we know what they will pay for them. Five Guys Burgers and Fries had the benefit of decades of established data, experienced management and an established industry & supply chain.
Compare that to the hot new franchise concepts, which are predicated on unproven assumptions, such as gamble that people will pay others to sell their junk on eBay, will pay regularly pay $6 for a bowl of Fruit Loops, or will pay someone else for the privilege of making their own frozen food.
Other hot new franchise owners are gambling that online access to video game software won’t wipe out every video game store, that people will buy gourmet food (at gourmet prices) from a food truck, or that people will pay to send Fido to summer camp.
There’s nothing wrong with trying an experimental, high-risk, innovative business venture … just don’t pay for the safety of a proven system when the concept itself is an experiment.
If you want to innovate, do it as an independent business.
If it works, you can always franchise it yourself… once it’s an old, boring, and highly successful business.
ARE YOU FAMILIAR WITH THE HOT NEW FRANCHISE MYTH? WHAT DO YOU THINK? SHARE A COMMENT BELOW.
Tags: Franchise myths, hot new franchise myth, Sean Kelly, franchise due diligence, how to buy a franchise, best franchises, how to open a franchise, franchising, franchise information, franchise warning
How Franchisors Should – And Shouldn’t – Respond to Internet Criticism
May 10, 2013
How Franchisors Should – And Shouldn’t – Respond to Internet Criticism by Sean Kelly, UnhappyFranchisee.Com
No company offering franchise opportunities enjoys having to publicly defend the image that they’ve carefully crafted through their marketing and public relations efforts.
No franchise company wants to air or discuss its dirty laundry in plain sight of customers, employees, shareholders, franchisees and prospective franchisees.
But now, thanks to the Internet, blogs like UnhappyFranchisee.Com and BlueMauMau.com, and social media sites like Facebook and Twitter, public discussion and scrutiny of franchise opportunities is a fact of life… and it’s not going away.
Here’s the story of two franchisors of fast-casual cafes that reacted very differently to similar complaints against them.
The first company reacted with anger, threats and legal action.
The second company reacted by taking the complaints seriously, by publicly addressing factual errors, and by acknowledging and taking steps to correct its shortcomings.
In the end, the way the franchisors chose to react to criticism will have a greater impact on their public images and ability to grow than either the original criticism or their well-crafted marketing/PR personas.
Guess which company is posting steady improvements and growth, and which is stalled out and attracting increasingly bad press?
Camille’s Sidewalk Café: Old School Bullying Backfires
In July, 2012 UnhappyFranchisee.Com posted that, according to a Small Business Administration report, Beautiful Brands International (BBI)’s Camille’s Sidewalk Café had a 58% SBA franchise loan default rate.
In the post CAMILLE’S SIDEWALK CAFE Franchise Complaints, we also published that, according to the company’s own disclosure document, the Camille’s U.S. franchise network has shrunk 60% since 2008.
The post attracted an outpouring of comments from a number of former Camille’s franchisees, who claimed that Camille’s and BBI CEO David Rutkauskas had misrepresented the opportunity, had failed to provide the necessary franchisee support, and was indifferent to whether they succeeded or failed once the initial check cleared.
Camille’s franchisees reported having lost as much as a million dollars, and many recounted the personal financial struggles, including bankruptcy, they endured as a result of investing in the Camille’s franchise.
UnhappyFranchisee.Com contacted David Rutkauskas, CEO of Beautiful Brands International, and offered to publish his response, clarification, or rebuttal to the allegations. We told Mr. Rutkauskas that if there were merit to some of criticism, that we would be happy to report what steps he and Beautiful Brands have taken or were taking to address and correct these problems.
Instead of responding to numerous offers to join the conversation, David Rutkauskas had his attorney send threatening letters to the former franchisees who had shared their experiences and posted comments under their real names.
UnhappyFranchisee.Com did not take down the comments. We once again offered Mr. Rutkauskas a chance to address the criticism.
Beautiful Brands then filed a lawsuit against me (then later dismissed it) for expressing my opinion on another website.
In subsequent interviews, David Rutkauskas tried to maintain the success-story façade he had created for his chain, and, when confronted with the unavoidable facts, he blamed the franchisees themselves, he blamed the economy, he blamed partners for backing out of deals, he blamed misrepresentations on writers printing “off-the-record” comments, and he blamed UnhappyFranchisee.Com for focusing on the 70+ Camille’s franchisees that failed instead of the 28 or so that have survived.
In frustration at not being able to control the story, David Rutkauskas posted dozens of fiery personal Twitter attacks on me that included vulgarities, profanity, threats, homophobic (though I’m not gay) and anti-semitic (though I’m not Jewish) insults and invitations to come to Tulsa to fight him (“settle this like men”).
Instead of expressing concern for the plight of the franchisees who failed, instead of taking some responsibility or at least addressing the concerns that were raised, Beautiful Brands and David Rutkauskas’ responded in such a way that reinforced the franchisees’ claims that BBI is indifferent to their struggles, and will use bullying, threats and intimidation to hide their shortcomings.
Tropical Smoothie Café: Transparency, Concern & Action
Also in July, 2012 UnhappyFranchisee.Com posted that, according to a Small Business Administration report, Tropical Smoothie Cafe had a 23.58% SBA franchise loan default rate.
In the post TROPICAL SMOOTHIE CAFE Franchise Complaints, we also that the 300+ unit chain appeared to have a termination/reaquisition rate of about 18%.
While the Tropical Smoothie Café numbers were not nearly as disturbing as those of Camille’s Sidewalk Café, and while their post did not attract negative comments from franchisees, TSC did not attack us, sue us, or insult us on Twitter.
In contrast to Rutkauskas and BBI, Tropical Smoothie Cafe, LLC VP, Franchise Development Charles L. Watson sent us a report that indicated that they were aware of the problems, and had taken serious steps to reduce their franchise failures.
TSC had already hired franchise research firm FranData to do an analysis of their SBA loan default rate, and to assess the effectiveness of measures they had previously taken to reduce their franchise failure rates.
FranData reported that the SBA had overstated the TSC default rate, which is actually 15.54% (not 23.58%, as previously reported).
Furthermore, FranData reported that measures taken by Tropical Smoothie Café, including the raising of franchisee net worth requirements and adjustments in site selection criteria, had resulted in a reduction of franchise failures every year since 2007.
Even though the SBA loan failure rate of Tropical Smoothie Café is lower than the average for similar franchises (according to FranData), Watson told us they consider it still too high, and that the company “is working hard to bring it down through continued focus on franchisee profitability and business practices.”
Additionally, Mr. Watson reported a number of systemwide improvements, including:
- The addition of protected territories for franchisees,
- A positive ownership change and improving financials,
- The hiring of additional experienced franchise professionals to help support franchisees and build the TSC brand,
- Steadily increasing Average Unit Volume (AUV) which is now over $500,000.
Rather than threatening us with lawsuits and insults, Tropical Smoothie’s Charles Watson wrote to UnhappyFranchisee.Com: “I thank you for your efforts on behalf of prospective franchisees, we use your site to help guide us on what we need to fix / alter / do better with our system – you are providing some great free consulting, for prospective franchisees and franchisors!”
Why Internet Criticism is Good for Good Franchisors… And Franchising
Here’s the difference between good franchisors and bad franchisors when it comes to franchise marketing and franchisee recruitment:
Bad franchisors are on a hunt for the naïve, the trusting, and the inexperienced.
Bad franchisors want prospective franchisees who believe that franchising will give them unlimited freedom and the chance to be their own boss, to call their own shots, to control their destiny.
Bad franchisors want prospective franchisees who believe the bogus statistics that 95% of all franchises are successful, and that the few who failed did so because they didn’t follow the system, or they killed the Success Fairy by asking too many questions and thinking negative thoughts.
Good franchisors want smarter franchisees who have done their homework and have realistic expectations.
Good franchisors want franchisees who understand that every new business venture comes with risk, whether its franchised or independent.
Good franchisors want franchisees who understand that their franchise is not a magic, guaranteed money-machine, and that they will provide the tools but the franchisee must build the business, that the franchisee’s success will depend not only on the brand, the system, and the franchisee’s hard work, but also external factors, such as location, market and competition, that may be out of their control.
Most of all, good franchisors want franchisees who aren’t looking for some mythical perfect franchise system or “hot new concept,” but are looking for an organization that is dedicated to supporting its franchisees, and growing through mutual success with their franchisees.
The truth is there ARE no perfect, complaint-free franchise companies and there ARE no magical short-cuts to small-business success.
Good franchise companies shouldn’t fear online criticism.
As long as they are earnestly working to improve their franchise system and support their franchisees, they should be transparent about the challenges they are facing, and share the steps they are taking to overcome them.
They might lose some franchise prospects who are searching for the magic carpet to guaranteed, effortless success, but they will gain those who have realistic expectations, who know what they are getting into and who are up for the fight.
WHAT DO YOU THINKS? SHARE A COMMENT BELOW.
TAGS: Beautiful Brands, Camille’s Sidewalk Cafe, Tropical Smoothie Cafe, David Rutkauskas, Internet criticism, online criticism, online attacks, franchise public relations, franchise criticism, franchise marketing
BEAUTIFUL BRANDS’ David Rutkauskas Defends BBI’s PR Claims
April 30, 2013
Beautiful Brands International (BBI) and its CEO, David Rutkauskas, have faced criticism from UnhappyFranchisee.com for providing what we believe to be inaccurate and misleading representations to the media in recent years.
In our opinion, BBI has been able to create a public perception of robust growth and unfettered success, while hiding such challenges as widespread franchise closures, unsuccessful concept launches, and the apparently high defection rate of its franchise services clients (“brand partners”).
With each post we published, we invited Mr. Rutkauskas and BBI to provide rebuttals, clarifications, or corrections to our opinions, as it is our goal to provide both sides of the issue and let our readers decide.
We are pleased that David Rutkauskas has begun to publicly respond and engage in a dialogue over these important issues.
This post includes Mr. Rutkauskas’ justifications of BBI’s media representations as published in two posts on his blog (Facing the Lies of UNHAPPY FRANCHISEE, and My Response: Crushing the Distortions).
Criticism #1: That Beautiful Brands International (BBI) exaggerates the number of its franchise locations
UnhappyFranchisee.com believes that BBI misrepresents the size and growth of its company, in part by counting its clients’ locations as its own. So while the websites of BBI franchise brands Camille’s Sidewalk Cafe, FreshBerry, and Rex’s Chicken only list a total of only 71 locations open around the world, Rutkauskas claims “BBI has 297 locations open around the world…” (QSR, 3/12/13).
BBI’s Justification: BBI CEO David Rutkauskas states “As long as any brand is under our consulting umbrella it is counted as a Beautiful Brand… If you do business with us, then you are a Beautiful Brand.”1
Why this matters: Potential BBI franchisees and clients should be provided with undistorted information regarding the size and growth of the franchisor. If BBI signs up a 200-unit company for brokerage services, it is deceptive to claim that BBI has grown by 200 units that day. This practice is like a local sign shop claiming it has 30,000 locations worldwide because it makes banners for Subway.
Our recommendation: To avoid misleading its franchise & partner prospects, we recommend that BBI clearly differentiate between the number of locations under its own brands and the number of units its clients control… and never combine the two.
Criticism #2: That BBI promotes unsubstantiated/deceptive growth projections
UnhappyFranchisee.Com has criticized BBI for having made many unrealistic and misleading representations regarding its future growth, such as the 2007 claim that it “holds franchise agreements for another 900 Camille’s to open over the next five years.” Six years later, BBI apparently oversees only 28 Camille’s restaurants. An analysis of the company’s disclosure documents from the time the claim was made did not turn up any evidence that there were ever franchise agreements signed for 900 Camille’s locations.
BBI’s Justification: Mr. Rutkauskas states “I’ll be the first to admit that the economy has smacked us hard. Just like many companies, we anticipated a solid upward trajectory in regards to our brand growth, only to come face to face with the economic realities of the last six years.”1
Why this matters: Distracting readers with optimistic growth projections and plans can be an effective way of misdirecting attention from the much more sobering reality reflected in the company’s Franchise Disclosure Documents (FDD). The FTC requires certain disclosures be provided to franchisees; franchisors should not use the press to end-run FTC protections.
Our recommendation: As Mr. Rutkauskas acknowledges that he does not know what will happen in the coming months or years, we recommend that he stick to promoting what he has accomplished, and report only franchises that actually open, rather than promoting the number he intends to open. Further, we recommend that BBI representations to the media regarding franchises sold, franchises “sold but not open,” and projected store openings match the information disclosed by BBI in Item 20 of its Franchise Disclosure Documents (FDD).
Criticism #3: That BBI & David Rutkauskas disseminate unsupported/prohibited earnings claims
The Federal Trade Commission (FTC) prohibits franchise sellers from providing sales or profitability claims to franchise prospects unless those claims are properly documented in the company’s required disclosure documents. We have pointed out that BBI has made numerous earning representations in the press, including that Camille’s Sidewalk Café franchises average $700,000 to $800,000 in annual sales, and that a Freshberry unit is projected to have $400,00 in sales, and that the now-defunct Coney Beach franchise would average an impressive $1M in unit sales, with a $9.00 average purchase and an exceptionally low 21% food cost.
BBI’s Justification: According to Mr. Rutkauskas, the numerous published earnings claims were the fault of writers printing “off-the-record” comments. Says Rutkauskas: “It is not our policy to publish or document earnings claims. Any past off the record comment was meant to be a personal opinion based off of previous assessments and not meant to be a published fact on behalf of BBI.”1
Why this matters: The FTC prohibits unsubstantiated financial representations because, historically, many franchisees have been hoodwinked by unethical and/or unrealistically optimistic franchise sellers. It’s irresponsible to end-run FTC safeguards and provide unsupported, misleading earnings representations.
Our recommendation: Mr. Rutkauskas and BBI should refrain from providing earnings information or financial representations to the press, either on or off the record.
Criticism #4: BBI claims it makes “brand partners” successful, but former partners are prohibited from sharing their experiences or honest opinions
More than 20 brands have been touted as receiving the franchise development, marketing & sales support of the BBI “partnership” program. All but a very few seem to have severed ties with BBI before the end of their contract terms; those that remain don’t appear to have added franchise units. In fact, we haven’t been able to find a single BBI partner that credits BBI with making them “bigger and better.”
BBI’s Justification: Mr. Rutkauskas insists “BBI has a history of making brands better and securing growth for companies.” He cites a former brand partner he claims to have “generated $884,000” for and “laid the foundations” for their 10 franchise units1. When we contacted BBI brand partners (including the aforementioned partner), most said they weren’t allowed to discuss their experience with BBI because of a gag order type clause in their separation agreements. In fact, those who severed ties are either prohibited from sharing their experiences due to gag orders required by David Rutkauskas and BBI, or because they fear retaliation from BBI. BBI appears to be free to make representations about its former clients, but their former clients are prohibited from refuting those claims.
Why this matters: BBI “partner brands” are small companies who reportedly pay BBI $50,000 up-front, plus a percentage of future franchise fees and royalties. This can be a substantial loss of time and money if they do not get the promised results. Shouldn’t prospective partners be able to hear the experiences and opinions of former brand partners? Prohibiting customers from expressing their opinions is a troubling practice and a potential red flag.
Our recommendation: BBI should nullify the “gag orders” on their clients’ separation agreements and allow former “partner brands” to candidly share their experiences and opinions without fear of repercussions from BBI & David Rutkauskas.
Criticism #5: That BBI misrepresents both its track record and investment appeal
Since at least 2007, David Rutkauskas has regularly claimed that BBI is generating unprecedented growth and breaking its previous sales records.
Despite dozens of excited announcements of new partnerships and huge development deals, BBI’s actual track record does not appear, in our opinion, to be a success story for its franchisees:
- Roughly three times more Camille’s Sidewalk Café franchise owners lost their investments and shuttered their cafes than managed to stay in business.
- The Small Business Administration reports a SBA loan default rate of 58% for Camille’s Sidewalk Café franchises, one of the worst in the nation.
- The highly touted BBI Coney Beach franchise chain folded shortly after its debut, and the Rex’s Chicken concept has failed to grow past a single unit.
- Despite a nationwide frozen yogurt boom and claims of development deals for hundreds of units, FreshBerry appears to have fewer than 20 domestic locations and less than 50 total units worldwide.
- Despite 20+ “partner” brands having entrusted their marketing and sales to BBI, not a single one has credited BBI with successfully recruiting franchisees on their behalf.
BBI’s Justification: David Rutkauskas complains that UnhappyFranchisee.com doesn’t acknowledge BBI’s successes and “doesn’t find having over 28 Camille’s Sidewalk Cafes open around the globe, over 50 FreshBerry’s open and thriving and selling multiple franchises for different brands around the world as being successful.”1
Why this matters: Prospective franchisees are being asked to make significant financial investments, ranging from up to $386,000 for a FreshBerry franchise to more than $600,000 for a Camille’s Sidewalk Café franchise. We believe they deserve to have a realistic idea of the risks involved, and how the franchise brands and concepts performed in the past.
Our recommendation: Beautiful Brands should be transparent about the challenges they’ve faced, the losses they’ve suffered, and the specific programs and practices they’ve implemented to combat their franchise failure rate. Having better-informed franchisees with a realistic understanding of the risks involved will be better for BBI in the long run.
Criticism #6: That BBI bullies and threatens its former franchisees and critics to keep silent
Former Camille’s franchise owners who shared their experiences on UnhappyFranchisee.Com received threatening letters from BBI’s law firm. A female brand partner critical of BBI received a vulgar, insulting email from Mr. Rutkauskas promising to sue her after she expressed her opinions. BBI sued UnhappyFranchisee.com’s Sean Kelly (then dropped the suit), and continues to harrass him by Tweeting profanity-laced insults and invitations to fight (yes, fist-fight) for expressing his opinions.
[Image, left: one of numerous bullying tweets directed at UnhappyFranchisee.com's Sean Kelly, who tweets as @FranchisePick. Click to enlarge. Warning: contains profanity]
BBI’s Justification: David Rutkauskas often characterizes opinions he disagrees with as “lies” intended solely to hurt him and his business. He states: “Just like you can’t go into a crowded movie theater and yell ‘fire,’ without cause, you cannot injure someone’s livelihood with baseless lies meant only to destroy his or her reputation.”
Why this matters: The First Amendment protects Americans’ right to express their opinions about BBI or any other company. It protects our right to make statements of fact as long as we can reasonably substantiate the truth of those statements. BBI and David Rutkauskas want their many critics to believe they can successfully sue them for speaking their opinions or the truth. They can’t. That’s why the suit was dismissed against UnhappyFranchisee.Com’s Sean Kelly and why Camille’s franchisee’s negative opinions still remain on UnhappyFranchisee.Com.
UnhappyFranchisee.Com’s intention is not to destroy anyone’s reputation, but to ensure that individuals and their families have solid, factual information on which to base the most important investment decisions of their lives. We are not yelling “fire” inside a crowded theater; we are alerting prospective moviegoers about the smoke coming out of the back door. If they still want to enter the theater, at least they’ve made an informed choice.
Our recommendation: Beautiful Brands and David Rutkauskas should cease all bullying tactics, if only because their bullying and harrassment does much more damage to their reputations than the original criticism. We recommend that Mr. Rutkauskas put that same energy into supporting current franchisees and partners and making them successful. Nothing will offset criticism more effectively than testimonials from successful franchisees and clients. So far, not a single one has spoken out in support of BBI.
1 David Rutkauskas’ rebuttal comments are from his blog post “My Response: Crushing the Distortions,” April 28, 2013 at http://davidrutkauskas.com/index.cfm?id=1&blogId=140. #
Also read:
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
BEAUTIFUL BRANDS Partner Program: Behind the Hype
ARE YOU FAMILIAR WITH BEAUTIFUL BRANDS INTERNATIONAL OR DAVID RUTKAUSKAS? SHARE A COMMENT BELOW.
tags: David Rutkauskas, Beautiful Brands International, BBI, Camille’s Sidewalk Cafe, Unhappy Franchisee, Sean Kelly, franchise opportunities, franchise bullying
JONATHAN FORTMAN: Corporate Bullying Part 3
April 29, 2013
Attorney Jonathan Fortman contributed this third part of a three-part series on the unsuccessful corporate bullying tactics of Beautiful Brands International (BBI) against UnhappyFranchisee.Com publisher Sean Kelly.
You can read the Parts 1 & 2 here:
BEAUTIFUL BRANDS: Standing Up to Corporate Bullies
JONATHAN FORTMAN: Corporate Bullying Part 2
Corporate Bullying – Part 3 – The Finale
By Jonathan Fortman April 28, 2013
Welcome to Part 3 of my blog series about corporate bullies.
I did not intend on making this into a series. Ongoing events in the underlying case have just naturally led me along the path. In this finale, I’ll talk about how the bully, after being challenged in the legal system, will then revert back to an adolescent playground bully thereby completing the circle.
I have three children. The youngest is my 10 year-old son. He thinks the old man can do no wrong. Everything I say is right and he looks up to me. It’s a very special time in the life of a parent.
My middle child is my 14 year-old daughter. She’s at that stage in life where she thinks she’s always right and her parents are dorks who don’t know anything. Don’t get me wrong, I think she’s a great kid. However, I think our Creator makes us all go through that stage so that we can undergo a few lessons in the school of hard knocks.
My third child is my stepson who will turn 21 in a few weeks. He has matured to the point where he has gone through a few of life’s lessons and is seeing that the old man knows what he’s talking about, at least some of the time. I must admit those moments are very gratifying. In the case I spoke about in Part 1 of this series, I made certain statements concerning the effect of standing up to a bully. As that case has unfolded, everything I said in Part 1 has proven to be true. The old man was right.
Consider yourselves all my children coming of age as I explain to you exactly why the old man was right.
In BEAUTIFUL BRANDS: Standing Up to Corporate Bullies, I talked about the case of Beautiful Brands International (“BBI”) v. John Doe. I told you that if you stand up to a bully, 99% of the time the bully will back down. In the BBI case, my client, Sean Kelly, stood up to that bully. At the time Part 1 was published, we had no idea if the bully would be among the 99% who back down or the 1% who keep coming because they’re too stupid to realize they’ve lost their power.
In JONATHAN FORTMAN: Corporate Bullying Part 2 of the series, I talked about the bully blinking first.
Basically, the bully responded by publicly crying about how it was so mistreated and stating that its victim was really the bully. When Part 2 was published, the case against John Doe was still pending. We disclosed Sean Kelly’s identity and basically dared the bully to replace Sean Kelly for “John Doe.” Since part 2 was published, the case against “John Doe” has been dismissed. There was no substitution of Sean Kelly for Mr. Doe. The bully has backed completely down.
In this finale of the series, I wanted to discuss the way in which these disputes can turn full circle from corporate bullying through perverted use of the courts to simple adolescent playground antics. BBI was founded by a man named David Rutkauskas. I don’t know Mr. Rutkauskas. However, reviewing his twitter account, blog, and the glowing PR materials his company throws out, I get the distinct impression that Mr. Rutkauskas thinks very highly of himself. After all, what kind of business executive sends out a tweet showing off his $100,000 Mercedes?
There’s nothing wrong with thinking highly of yourself or flaunting your material possessions if you are legitimate. The problem is that if your business is based solely on fluff and no real substance, it will eventually bring you down. You might as well put a big, huge red target on yourself.
I contrast Mr. Rutkauskas’ behavior with that of Warren Buffett and Sam Walton, two of the most successful people in history. By all accounts, both men came from humble beginnings, worked hard, and became giants in the business world. However, neither of them ever flaunted their wealth. They stayed true to their core values. Those successful in business can do that because they know that their success never depended on fluff. Rather, their success was directly tied to their work ethic. Their values drive them, not their material possessions or the need for self-promotion.
If there’s any doubt about the difference between Mr. Rutkauskas and the real business tycoons, one need only look at several tweets Mr. Rutkauskas sent after his business practices were questioned. After the case was filed against John Doe, Mr Rutkauskas made a series of tweets directed to Sean Kelly that were, to put it mildly, crude and offensive. This is a family-oriented blog so I won’t set out the contents of the tweets. Interestingly, the day after the tweets were made, Mr. Rutkauskas removed them from his twitter account. However, I had screen shots of the tweets and made sure to include those in my letter to the BBI attorney when I disclosed Sean Kelly’s identity.
(Here’s a side-lesson, my children, never tweet while under the influence of a mood-altering substance).
I thought that dismissal of the case against Mr. Doe would be the end of this saga.
I was wrong.
Yesterday, Mr. Rutkauskas tweeted, and I quote: ”hey there Sean Kelly, why don’t u travel to Tulsa and say all this Bull S@*t to my face?”
The first thing I need to point out to Mr. Rutkauskas is that “bulls@*t” is a single word. If you’re going to act tough in a tweet, try to be grammatically correct. This tweet is comical. It shows that the old man was more right than he even knew.
The corporate bully has now reverted to middle school tactics of daring its victim to a fight on the playground.
We have come full circle to the days of our youth. Would Warren Buffett or Sam Walton had sent such a tweet had Twitter been around during their primes? Obviously not. In my opinion, Mr. Rutkauskas has now shown himself to be nothing more than an egotistical, self-absorbed peddler of fish oil.
As my daughter would say, he now has no relevance.
Thanks for reading the conclusion to this series. Call us if you need help standing up to corporate bullies like this. We’d be happy to help.
Jonathan E. Fortman
For more information on Jonathan Fortman and Fortman Law, visit the Jonathan Fortman profile page in our franchise attorney directory.
This article was originally published at the Fortman Law Blog and is reprinted here by permission of the author.
Related Reading:
Beautiful Brands: Why Franchise Bullying Backfires
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
TAGS: Jonathan Fortman, Attorney Jonathan Fortman, Jon Fortman, Sean Kelly, UnhappyFranchisee.Com, Beautiful Brands, BBI, David Rutkauskas, corporate bullying, bullying, franchise bullying
JONATHAN FORTMAN: Corporate Bullying Part 2
April 29, 2013
Attorney Jonathan Fortman contributed the second part of a three-part series on the unsuccessful corporate bullying tactics of Beautiful Brands International (BBI) against UnhappyFranchisee.Com publisher Sean Kelly.
You can read the Part 1 here: BEAUTIFUL BRANDS: Standing Up to Corporate Bullies.
The Bully Blinked First
by Jonathan Fortman April 18, 2013
Several days ago I wrote about the case of Beautiful Brands, Inc. v. John Doe.
I used the facts of that case to describe the corporate bullies we confront on a daily basis. I described how standing up to bullies causes them to back down 99% of the time.
My client, John Doe a/k/a Sean Kelly stood up to the bully. Not only has the bully backed down, but is now crying like a baby.
The corporate bully is now trying to portray Sean Kelly as the bully.
Sean Kelly is far from a bully.
He gave the bully every chance to knock off the playground tactics to no avail.
The corporate bully knew that Sean Kelly was exposing the truth and tried to silence him by perverted use of the court system.
However, by taking a stand, Sean Kelly has forced the bully into admitting its mistakes.
Once again, I encourage anyone bullied by corporate thugs to stand up for what they know is right. Fight the fight knowing that truth is behind you. In the end, you will win.
To those companies who think that these tactics are good business practice, I encourage you to consider changing your strategy.
These tactics may work for a short period of time. However, if your goal is to have a viable business long-term, using threats and intimidation is not recommended.
I can guarantee such tactics will ultimately lead to failure.
Thanks for reading.
Jon
For more information on Jonathan Fortman and Fortman Law, visit the Jonathan Fortman profile page in our franchise attorney directory.
This article was originally published at the Fortman Law Blog and is reprinted here by permission of the author.
Related Reading:
Beautiful Brands: Why Franchise Bullying Backfires
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
WHAT DO YOU THINK? SHARE A COMMENT BELOW.
TAGS: Jonathan Fortman, Attorney Jonathan Fortman, Jon Fortman, Sean Kelly, UnhappyFranchisee.Com, Beautiful Brands, BBI, David Rutkauskas, corporate bullying, bullying, franchise bullying
BEAUTIFUL BRANDS: Why Franchise Bullying Backfires
April 11, 2013
David Rutkauskas, CEO of Tulsa-based Beautiful Brands International (BBI), publicly unleashed a string of insults and expletives on me that would have been shocking coming from a 7th grade boy, much less the founder of an international franchise company.
On his Twitter page, right next to the picture of his wife Camille and their two children, Mr. Rutkauskas (without the use of asterisks) called me a “#@!* face,” “fat ugly #!@* face,” and “ugly mother #!@*.”
(I have withheld the screenshot of the attack for the moment, but may include it in a future post).
What specifically set Mr. Rutkauskas off was Julie Bennett’s unflattering Franchise Times article (Reality Check), which had been prompted by my reporting about BBI on UnhappyFranchisee.Com.
But the deeper source of David Rutkauskas’ rage, in my humble opinion, is that his attempts to bully writers, his former franchisees, employees, service providers and partners is backfiring, big time.
Mr. Rutkauskas and his attorney, Robert Sartin of Barrows & Grimm P.C., haven’t caught on that bullying, in the Internet age, will do much, much greater damage to their reputations than the original criticism.
Old School Bullying Backfire #1
Last July, UnhappyFranchisee.Com published a post on the high SBA franchise loan default rate (58%) of Beautiful Brands’ Camille’s Sidewalk Café (CAMILLE’S SIDEWALK CAFE Franchise Complaints). The posting prompted numerous former Camille’s franchisees to share their experiences and their complaints alleging deceptive franchise sales tactics, lack of support, and overall indifference to their success on the part of BBI and Rutkauskas.
Franchisees who posted with their real names almost immediately received threatening letters demanding they retract their comments. UnhappyFranchisee.Com removed the franchisees’ names, but refused to take down the comments.
In fact, the bullying of the franchisees by Beautiful Brands & Sartin prompted several more posts, and encouraged UnhappyFranchisee.Com to look deeper into what else BBI was so intent on hiding.
Bullying Backfire #1.
Twitter Threats & Libelous Attacks
In addition to its own franchise brands (Camille’s, Freshberry, Rex’s Chicken), BBI provides franchise development and outsourced sales services to “partner brands.”
After UnhappyFranchisee.com reported on the seemingly high attrition and low success rates of BBI “partner brands,” (BEAUTIFUL BRANDS Partner Program: Behind the Hype) two anonymous Twitter accounts (@MissTroothbeTold, @FuckOffLiars) posted threats, insults and libelous comments about several former BBI partner brands, the former President of BBI, a former franchise sales service provider to BBI, and me.
These Twitter attacks falsely alleged that one former BBI partner’s stores were closing and its founder had been ousted, and another partner brand was being sued for food poisoning.
@FuckOffLiars threatened me directly using both my real name and Twitter name: “…We are watching u and your lies… we know where you live.&.HaHa…#GunsareLegal.”
I reported the threat to the FBI with my suspicion* that it could possibly be David Rutkauskas or a close associate. Bullying Backfire #2.
David Rutkauskas and Robert Sartin have reached the moment that every bully dreads: when that one crazy kid doesn’t run, even when his nose is bloodied and his jeans are torn.
The truth is, in America we have this thing called the 1st Amendment. We have the right to state facts, as long as they are true. We have the right to express our opinions, as long as they are clearly stated to be our opinions.
BBI Files Suit Against “John Doe” (aka Me)
BBI’s hometown paper, Tulsa World, published an article (Camille’s empire copes with setbacks) on the decline of Beautiful Brands which included a scathing commentary on Camille’s franchise support by a franchisee who lost everything, including his marriage, in the ordeal. Posting as Unhappy Franchisee, I left four pretty innocuous comments on the article. Many of the other 29 comments left on the article were less innocuous.
BBI attorney Robert Sartin filed suit against “Unhappy Franchisee” (as “John Doe) and subpoened Tulsa World and Google demanding my identity. It’s no big secret that I run UnhappyFranchisee.Com, so I believe the real motive was to send a bullying threat to those who dare express their opinions about BBI, even anonymously. A story and the suit itself appeared in the Tulsa Journal Record (along with the obligatory deception that BBI has “297 locations around the world,” when their websites list 72 locations) the day after the complaint was filed .
Attorney Jonathan Fortman, of St. Louis-based Fortman Law, has agreed to defend me against the bullying tactics of David Rutkauskas, BBI and Robert Sartin. I waived my anonymity, as I am not afraid to defend my views and actions out in the open. I hope David Rutkauskas is ready to do the same. I expect the discovery process will prove to be Bullying Backfire #3.. (and more).
Why Franchise Bullying Backfires
On UnhappyFranchisee.Com, I expressed my opinion that David Rutkauskas and Beautiful Brands International have used four publications in particular (Tulsa World, The Journal Record, QSR, Fast Casual) to promote the illusion that BBI is a thriving, successful, growing franchise company when, in fact, more BBI-owned franchises have closed than are successful and many of its “partner brands” have parted ways without selling a single franchise.
David Rutkauskas responded with tactics that have worked, to a limited degree, in the past: bullying and legal threats.
But David Rutkauskas and Robert Sartin have reached the moment that every bully dreads: when that one crazy kid doesn’t run, even when his nose is bloodied and his jeans are torn.
The truth is, in America we have this thing called the 1st Amendment. We have the right to state facts, as long as they are true. We have the right to express our opinions, as long as they are clearly stated to be our opinions.
In my opinion, none of the fact-based criticisms that I have expressed come close to impuning the reputation of Beautiful Brands and David Rutkauskas as do their remarkable personal and unprofessional Twitter attacks (Bullying Backfire #4) and their attempts to use the legal system to strip good people (the former franchisees and partners who bought Rutkauskas his house and Mercedes, and who provided the funds for Sartin’s invoices) of their 1st Amendment right to free speech.
Potential franchisors would do well to watch how well bullying works out for David Rutkauskas and Beautiful Brands International.
As is so often the case, the attempted cover-up will, IMHO, prove to be much more damaging than the initial allegations.
* I don’t have proof that Mr. Rutkauskas posted these threats directly. I hope to find out the identity of the Tweeter via subpoena if our lawsuit advances.
Also read:
BEAUTIFUL BRANDS: Standing Up to Corporate Bullies
BEAUTIFUL BRANDS INTERNATIONAL (BBI): Behind the Hype
DAVID RUTKAUSKAS Are His 500,000 Twitter Followers Fakes?
ARE YOU FAMILIAR WITH DAVID RUTKAUSKAS, BEAUTIFUL BRANDS OR THE 1ST AMENDMENT? SHARE A COMMENT BELOW.
TAGS: Beautiful Brands, BBI, Beautiful Brands International, David Rutkauskas, FreshBerry, Camille’s Sidewalk Cafe, Rex’s Chicken, Robert Sartin, Jon Fortman, Sean Kelly, franchise opportunities, franchise hype
JONATHAN FORTMAN: Standing Up to Corporate Bullies Part 1
April 8, 2013
Beautiful Brands, David Rutkauskas & his attorney Robert Sartin are using any means possible to try to keep critics from sharing their experiences with their franchise company, it seems.
Attorney Jonathan Fortman says there’s a name for their tactics: Bullying.
Standing Up to Corporate Bullies: When the Courtroom Becomes the Playground
by Jonathan Fortman
I have come to realize that my professional life basically boils down to standing up to bullies. The only difference is that the playground is now a courtroom instead of an asphalt lot behind my elementary school. Our practice primarily consists of representing franchisees who have been ripped off by con men and thieves disguised as franchisors who, many times, are no different from the bullies we all encountered as kids.
Instead of using physical strength that childhood bullies use, these grown-up bullies use their money to try to control their prey. The vast resources these bullies have can be a very effective deterrent to those who may seek to challenge questionable business practices. However, when those victimized by such bullies stand up to these con men and thieves, the victims usually win. I use the bully analogy as a way of introduction to one of our recent cases. Beautiful Brands International, LLC, (“BBI”) is a company based in Oklahoma. They tout themselves as “premier franchise development and restaurant innovation company.” However, if recent articles in the Tulsa World and Franchise Times are to be believed, the “innovation” is failing and there are many unhappy franchisees and brand partners. I am not here to talk about the problems in the BBI system, though. This article is about the blatant bully tactics this company is taking to silence its critics.
After the article critical of BBI was published by the Tulsa World, several comments were made online about the company. A few of those comments were made by a user known as Unhappy Franchisee and Unhappyfranchisee.com. Keep in mind that there were several other comments by other posters on the site. However, BBI singled out Unhappy Franchisee and filed suit against “John Doe.” BBI used that filing to issue subpoenas to the Tulsa World and Google to obtain identifying information about Unhappy Franchisee. I was contacted by “Mr. Doe” and agreed to take the case.
At first, Mr. Doe and I discussed filing motions attacking the subpoenas by asserting his First Amendment right to free speech. However, after further discussions, it occurred to us that BBI was simply using the subpoenas to bully my client and as a deterrent to others standing up to their suspicious business practices. We know that BBI already knows the identity of “John Doe” as several threatening, crude and outrageous tweets have been directed to him by this “premier” franchise development company. Reading those tweets brought me full circle back to the days on the playground. It was time to stand up to the bully.
“Mr. Doe” authorized me to disclose his identity to the attorney for BBI which I did today. Mr. Doe is a man by the name of Sean Kelly. Mr. Kelly operates a website known as http://www.unhappyfranchisee.com. That site is an invaluable resource for those considering the purchase of a franchise and for those having issues with their franchisor. There is power in numbers and the site gives a voice to those who have been bullied and beat down by fraudulent and failing franchise systems. Needless to say, Sean Kelly is not very popular with the bullies. Sean should be commended because by agreeing to the disclosure of his identity, he has now opened himself up to a lawsuit alleging that he defamed this “innovative” company. However, Sean Kelly not only talks the talk, he walks the walk. Sean is in the business of helping franchisees like I am. He has been in that line of work much longer than me. I can tell you that we do not do this to get rich. We do it because it’s the right thing to do. It will now be interesting to see what the bully does.
I have a 9-year-old son (actually, he’ll be 10 at the end of this month). I have always told my son, much to the dismay of his mother, that if you stand up to a bully, 99% of the time they will back down. The other 1% of the time, the bully keeps coming because they lack the intellectual capacity to see that they have lost their power. I see the exact same scenario play out in the courtroom. When those victimized by these overgrown bullies stand up to them in our playground known as the courtroom, they see that they are now on a much more level playing field. Unlike the playgrounds of our youth, the justice system operates under a set of rules that all parties must respect. Justice requires that these rules be applied in a non-discriminatory fashion without regard to the financial strength of the parties. Many times franchisors try to use the court system to further bully their victims. However, if the victims stand up for their rights, our justice system will neutralize that improper and perverted use of the system.
[Pictured, left, attorney Jonathan Fortman]
I am proud to represent individuals who, at one time, felt like they lacked the power to stand up to bullies. To see their joy and happiness when they are vindicated in the justice system is worth more than any amount of money I could ever be paid. I am also proud to represent Sean Kelly, a friend and a man who has inspired and given me the strength to continue these fights throughout the past several years. This is not an easy profession, but Sean Kelly, through his actions, shows me that I am not alone. If you have been victimized by a company who has taken money from you by fraud, don’t be afraid to stand up for yourself.
We are here to guide you through the legal system and take the fear of the unknown out of the equation. We are here to use the power of the judicial system to advocate for you. Call us for a free and completely confidential consultation.
Jonathan E. Fortman
LAW OFFICE OF JONATHAN E. FORTMAN, LLC
250 Saint Catherine Street
Florissant, Missouri 63031
(314) 522-2312
jef@fortmanlaw.com
HAVE YOU BEEN BULLIED BY BEAUTIFUL BRANDS, DAVID RUTKAUSKAS OR OTHERS WHO SEEK TO INTIMIDATE YOU INTO SILENCE? SHARE A COMMENT BELOW.
TAGS: Beautiful Brands, BBI, Beautiful Brands International, David Rutkauskas, FreshBerry, Camille’s Sidewalk Cafe, Robert Sartin, Barrows & Grimm P.C. Tulsa, Sean Kelly, UnhappyFranchisee.Com, Jon Fortman, Fortman Law, Jonathan Fortman
Mobile Tool Franchise Guide
March 13, 2013
